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So... I agree that Bitcoin has some advantages, but it's disadvantages are quite high as well. It seems to me that all the money going into Bitcoin mining equi

So... I agree that Bitcoin has some advantages, but it's disadvantages are quite high as well. It seems to me that all the money going into Bitcoin mining equipment, and all the power being used to run it is essentially an indirect tax on Bitcoin usage... I wonder what the total value of Bitcoin transactions in USD compared to the cost of electricity to keep the block chain up is. The true value that Bitcoin mining provides must be some low percentage of the total Bitcoin transaction volume... or am I missing something?

dragontamer 13y ago
It is impossible for Bitcoin transactions to take place without miners. BTC miners provide cryptographic integrity, proving that transactions took place at a certain time between certain people. Bitcoin is purely held up by the community of miners. The integrity of BTC becomes greater and greater the more trusted miners enter the system.
- pontifier 13y ago
  Couldn't this be achieved in some sort of other way? One that does not require hundreds of thousands of dollars worth of equipment and electricity? Couldn't a regular PKI message digest on the transaction list work? I suppose there's something I'm not getting about this.
  - dragontamer 13y ago
    Bitcoin is a voting-based protocol. The "vote" with 51% of the computational power of the system wins. By performing very very hard math problems with every PKI digest (ie, the "proof of work"), with a "difficulty level" such that it'd take the entire BTC network approximately 10 minutes to find a solution... then it becomes extremely extremely difficult for someone to enter the BTC system and screw up the public ledger. You see, BTC is a distributed database, cryptographically signed by the BTC miners every 10 minutes. The difficulty of _performing_ the signature is automatically adjusted to take a ridiculous amount of time.

dragontamer 13y ago

It is impossible for Bitcoin transactions to take place without miners. BTC miners provide cryptographic integrity, proving that transactions took place at a certain time between certain people. Bitcoin is purely held up by the community of miners. The integrity of BTC becomes greater and greater the more trusted miners enter the system.

pontifier 13y ago
Couldn't this be achieved in some sort of other way? One that does not require hundreds of thousands of dollars worth of equipment and electricity? Couldn't a regular PKI message digest on the transaction list work? I suppose there's something I'm not getting about this.
- dragontamer 13y ago
  Bitcoin is a voting-based protocol. The "vote" with 51% of the computational power of the system wins. By performing very very hard math problems with every PKI digest (ie, the "proof of work"), with a "difficulty level" such that it'd take the entire BTC network approximately 10 minutes to find a solution... then it becomes extremely extremely difficult for someone to enter the BTC system and screw up the public ledger. You see, BTC is a distributed database, cryptographically signed by the BTC miners every 10 minutes. The difficulty of _performing_ the signature is automatically adjusted to take a ridiculous amount of time.